2023 (2) TMI 305 - AT - Income Tax

Income deemed to accrue or arise in India - receipt from Satellite Transmission Services - Royalty receipts as defined in Explanation II to section 9(1)(vi) of the Act and Article 12(3) of India USA Double Taxation Avoidance Agreement (DTAA) - HELD THAT - As decided in assessee own case 2019 (4) TMI 1426 - ITAT DELHI receipts from Satellite Transmission Services cannot be treated as royalty, hence, not taxable at the hands of the assessee in India. Accordingly, addition made is deleted. Appeal of assessee allowed.

Summary

Issues involved:
1. Challenge to final assessment order under Income-tax Act, 1961 for assessment year 2019-20.
2. Determination of whether receipts from Satellite Transmission Services constitute royalties as per relevant provisions.

Analysis:
1. The appeal challenged the final assessment order for the assessment year 2019-20 under the Income-tax Act, 1961, following a direction from the Dispute Resolution Panel (DRP). The key issue revolved around whether the receipts from Satellite Transmission Services qualified as royalties under Explanation II to section 9(1)(vi) of the Act and Article 12(3) of the India-USA Double Taxation Avoidance Agreement (DTAA).

2. It was established that the issue had been consistently dealt with in previous assessment years and had been decided in favor of the assessee by both the Tribunal and the Jurisdictional High Court. The Tribunal's decision in the preceding assessment year, 2018-19, reiterated the stance that the receipts from Satellite Transmission Services were not taxable as royalties in India, aligning with past decisions and the High Court's affirmations.

3. Citing a series of assessments from 2006-07 onwards, it was emphasized that the Tribunal had consistently ruled in favor of the assessee, supported by the Jurisdictional High Court's affirmations. The Tribunal's decisions across various assessment years had consistently held that the amounts received from Satellite Transmission Services were not taxable as royalties in India, a stance reaffirmed in the present appeal.

4. The Tribunal, in line with its previous decisions and the High Court's rulings, concluded that the receipts from Satellite Transmission Services did not qualify as royalties and were not taxable in India. The appeal was allowed, and the addition made in the assessment was deleted based on the established legal precedents and interpretations of relevant provisions.

Conclusion:
The judgment by the Appellate Tribunal ITAT Delhi, in the case challenging the final assessment order for the assessment year 2019-20, reaffirmed the consistent stance that receipts from Satellite Transmission Services did not constitute royalties as per the applicable provisions. The decision was based on past rulings and interpretations, leading to the allowance of the appeal and the deletion of the addition made in the assessment.